Swiss National Bank Reports 2 Billion Franc Loss in Q2
Jul 31, 2024
The Swiss National Bank (SNB) reported a loss of 2 billion Swiss francs ($2.27 billion) for the second quarter of the year.
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This is a big drop from the 58.8 billion franc profit in the first quarter. The loss occurred despite gains in the SNB's gold and stock investments.
In the second quarter, the SNB gained 3.26 billion francs from its 1,040 metric tons of gold. The price of gold went up due to global political tensions. However, the bank faced losses in other areas. It reported a 3.10 billion franc loss from its foreign currency holdings. The Swiss franc’s higher value and lower bond prices wiped out the benefits of rising global stock markets.
Additionally, the SNB lost 2.06 billion francs on its Swiss franc positions. This loss mainly came from paying interest on deposits held by commercial banks.
Despite the large loss, it is not a major issue for the SNB. The central bank’s main goal is to keep prices stable, not to make a profit. The bank noted that its financial results depend on changes in gold, foreign exchange, and capital markets. Therefore, big changes are expected.
UBS economist Florian Germanier said the rising value of the franc could affect the SNB's results in the coming months. He expects the franc to strengthen further due to other central banks lowering rates and increased safe-haven flows from global tensions.
